- (1.) This is an appeal from the decision of Megarry J. which is reported in [1971] 1 W. L. R. 11; [1971] 82 I. T. R. 222, where the facts and the problems are set out and to which reference may be made. I take the first question whether the sum of Pounds 10,000 received by the taxpayer was a consideration which either was or represented the value of, assets which were available for distribution by the company by way of dividend. This depends on the one question - whether "available" means legally available in the point of company law, or whether it has some other or wider meaning of available in some commercial sense. I, for my part, do not think that I can improve upon the reasons of Megarry J. for holding that the former meaning is the correct one, and I am content to adopt it, and I, therefore, uphold his judgment on this point : see [1971] 1 W. L. R. 11, 25-26, 27.
(2.) I add that, though it was not apparently so contended below, it was suggested to us that the money borrowed from the bank was subject to a trust or condition to apply it only in purchases of the shares from the taxpayer, reference being made to Quistclose Investments Ltd. v. Rolls Razor Ltd. (In liquidation). I can only say that the facts in this case come nowhere near establishing such a situation.
(3.) Mr. Aaronson produced a point which was not ventilated below, to suggest that if the Crown was right on the meaning of "available" it would leave no scope for the reference in section 28(2) (c) to the consideration being or representing the value of trading stock of the company, but Mr. Monroe gave an example which satisfies me that there might well be a case of consideration reflecting the increased value of retained trading stock though the accounts of the company would not reflect it or show any realised profit, and I think this possibility would be quite sufficient to justify a draftsman - determined so far as possible to leave no loophole - in introducing this reference to trading stock, while at the same time intending the meaning of "available" which is the one that I favour.;